California is a great state to live in, but the cost of living is also high. Therefore, slipping into debt is a likely occurrence. If you fall into debt and need a fresh financial start, you can always file for bankruptcy. Bankruptcy is a legal process where the law allows you to start afresh financially. In California, you can file for various types of bankruptcy. The most common are chapter 7 and chapter 13 bankruptcy.
Various factors might force you to file for bankruptcy. If you lose your job or your income decreases, it might become difficult to pay your debts. Falling sick and spending enormous cash on medical bills can also lead to bankruptcy. The main purpose of filing for bankruptcy is to receive debt discharge. Debt discharge means your creditors can no longer demand payment.
Filing for bankruptcy is a complicated process. That is why you should use an experienced bankruptcy attorney. If you are in California and want to file for bankruptcy, do not hesitate to contact the Los Angeles Bankruptcy Attorney. We have many years of experience in filing bankruptcy claims for our clients. We will be with you every step of the way. We also ensure you obtain a favorable outcome on your bankruptcy case.
Should You File for Bankruptcy?
Although filing for bankruptcy offers a fresh financial start, it nonetheless has some undesirable consequences. Filing for bankruptcy affects your credit score for a very long time. It becomes difficult to secure a loan or acquire a credit card. Instead of filing for bankruptcy, you can seek other alternatives. You can negotiate with your creditors. Some can allow you to pay smaller installments. Others might extend your repayment period.
Another alternative is to do nothing. As odd as it sounds, you can do nothing if you are in deep debt. Creditors cannot take your personal belongings like clothes, beddings, and other necessary items you need for survival even if they get a court order to repossess
If none of the above methods works, you need to file for bankruptcy.
Understanding Bankruptcy and Its Benefits
Bankruptcy is an excellent way of coming out of debt. If you are in deep debt, filing for bankruptcy is a great way to start over financially. However, if you are doing so in Rancho Santa Margarita, it is advisable to use the services of an experienced Rancho Santa Margarita Bankruptcy attorney. Bankruptcy stops harassing calls from creditors, wage garnishments, and some lawsuits. When you file for bankruptcy, many unsecured debts are discontinued. They include credit card debt, medical bills, personal loans, among others.
You have to pay some debts even if you file for bankruptcy. Debts like child support, alimony, student loans, and some tax debts are not forgiven or discharged. The two main types of bankruptcy you can file as an individual or a family are chapter 13 or chapter 7 bankruptcy.
The type of bankruptcy you qualify for depends on your income. To file for chapter 7 bankruptcy, you must pass a means test. If you do not qualify for chapter 7 bankruptcy, you can file for chapter 13 bankruptcy. Each of the chapters has its benefits and requirements.
Here Are Some of The Remedies That Bankruptcy Can Offer You Regardless of The Chapter.
Once you file for bankruptcy, the court orders an automatic stay. An automatic stay means that the creditors cannot harass you with calls or by using other means of debt collection. It also stops wage garnishment and some lawsuits. However, the creditors can request the court to lift the automatic stay. That’s why it’s essential to employ the services of a Rancho Santa Margarita Bankruptcy Attorney to represent you when creditors proceed to persuade the court to lift the automatic stay.
With an automatic stay, you cannot be evicted from your property as long as the bankruptcy case is in progress. Creditors cannot foreclose your house or repossess your car if the bankruptcy case is still in court.
Debts That Are Not Discharged Through Bankruptcy
Bankruptcy discharges your debts on secured property, but it does not discharge a lien on the property. A lien is a legal right that a creditor has on a property you used to secure the loan. The lien allows the creditor to sell the property and use the proceeds to pay the debt. With chapter 7 bankruptcy, the creditor can still foreclose your house if you have an unpaid mortgage. However, they can do so only after the automatic stay lifts.
You still have to pay child support, student loans, tax debts, and alimonies even if you file for bankruptcy. Your student loan can be discharged but only under exceptional circumstances. If you want the court to discharge your student loan in Rancho Santa Margarita, you need to use the services of an experienced Rancho Santa Margarita Bankruptcy attorney. Your attorney needs to prove to the court that you will suffer undue hardships by paying the student loan. They also need to prove that you do not have the ability whatsoever to pay the loan now or in the future.
Does Filing for Bankruptcy Affect Your Chances of Securing Employment in California?
The state of California protects you from being fired even after filing for bankruptcy. The law also protects you as a job seeker from discrimination from employers even if you have a bankruptcy history.
It’s against the law for an employer to fire you because you have filed for bankruptcy. According to Bankruptcy Code section 525(a) and (b), you cannot be fired due to bankruptcy. Section 525(a) protects government employees, while Section 525(b) protects private citizens.
In California, you are protected by California law section AB22, which prohibits an employer from requesting your credit report to make a hiring decision. Your credit report contains your bankruptcy filing report. However, some jobs require you to provide your credit report. Some of these positions include managerial posts, where you can access the company’s trade secrets, among other sensitive information. Some California state jobs are also exempt from AB22.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is so-called because it is found under Chapter 7 of the federal Bankruptcy Code. It is also known as straight bankruptcy, liquidation bankruptcy, or fresh start bankruptcy.
The cost of filing for chapter 7 bankruptcy in California is about $340. This fee includes filing and administrative expenses. The cost might go up due to the lawyer’s fee. Before you file for chapter 7 bankruptcy, you must complete a credit counseling course.
Qualification for Filing for Chapter 7 Bankruptcy
To qualify for chapter 7 bankruptcy, you must pass the means test. You must also not have filed for chapter 7 bankruptcy in the last six years or chapter 13 bankruptcy in the last eight years.
Chapter 7 Bankruptcy Filing Process
If filing for bankruptcy in Rancho Santa Margarita, you need to fill in certain forms. It is prudent to use a Rancho Santa Margarita Bankruptcy attorney to guide you on the form filling process. You start by filing a petition and filling other forms. After filling them, you file them at the bankruptcy court near you. The documentation you fill in asks you about your property, your debts, income, and monthly living expenses, and any exempt property you own.
Some of the exempt property includes your home, the car you use for day-to-day operations, household items, and trade tools, among other similar exempt properties.
Automatic Stay Afforded by Filing for Bankruptcy
Once you file for bankruptcy, an automatic stay comes into effect. The automatic stay protects you from constant harassment by creditors. The creditors cannot call you, repossess your vehicle or house, garnish your wages or employ similar debt collection measures.
Once you file for chapter 7 bankruptcy, the court takes over the control of your assets. When you file for bankruptcy, the law does not allow you to sell or give away any of your assets. You cannot pay any debts that you owed before filing for bankruptcy without the court’s permission.
The law allows you only in exceptional circumstances to sell or give away any property you have acquired after filing for bankruptcy. If you are filing for bankruptcy in Rancho Santa Margarita, it is advisable to use the services of an experienced Rancho Santa Margarita Bankruptcy attorney to guide you on the property you can sell during a bankruptcy case.
Chapter 13 Bankruptcy
In chapter 13 bankruptcy, you reorganize your payment plan with your creditors and keep your assets. The repayment plan usually takes three to five years. The court appoints a trustee who collects your payments and distributes them to creditors. Once you make the payments successfully for the repayment plan period, the court discharges any unsecured debts that you have not paid.
Who Qualifies for Chapter 13 Bankruptcy?
Like chapter 7 bankruptcy, you must complete a credit counseling course before filing for Chapter 13 bankruptcy. If you are in Rancho Santa Margarita, you should use a Rancho Santa Margarita Bankruptcy attorney to assist you in selecting the best credit counseling agency.
To qualify for chapter 13 bankruptcy, you must have a regular source of income. The payment is made according to a plan that you develop with your attorney’s assistance if you are filing for bankruptcy in Rancho Santa Margarita. When you deduct your expenses from your monthly income, the excess amount is called a surplus. The trustee uses this surplus to make payments to your creditors. With chapter 13 bankruptcy, you must make monthly payments to the creditors.
You might choose to file for chapter 13 bankruptcy if you are not eligible for chapter 7 bankruptcy. The court will deny your chapter 7 bankruptcy application if you qualify for chapter 13 bankruptcy.
It is advantageous to file for chapter 13 bankruptcy since some debts are not dischargeable. As such, you have to repay them even after filing for bankruptcy. Under chapter 13, you will clear these debts after a while. Unlike chapter 7 bankruptcy, where you sell your nonexempt property to clear debts, with chapter 13, you keep your property as you repay the loan. Creditors cannot come after your cosigners, provided you are repaying the loan under the plan.
When creditors agree to your payment plan, the court discharges any unsecured debt not cleared after the payment plan period expires. For some debts, though, you have to make the payment in full during the payment plan period. These debts include child support, most tax debts, employee wages and salaries, mortgage payments, secured loans on cars or other property. The creditor can repossess the vehicle or foreclosure your home if you fail to repay the loan in full.
In chapter 13, the court discharges any debt on unsecured loans that remain after completing the plan. Some of the unsecured debt includes credit card debt, medical bills, and personal loans.
The repayment plan period depends on your median income. If your average income is greater than your family’s median income, the same size as your own in your state, you must file for the five-year plan. If your average income is lower than your family’s median income, the size of your own in your state, you can file for the three-year plan. The plan cannot be less than three years.
Call A Bankruptcy Lawyer Near Me
Various situations might force you to file for bankruptcy. Job loss, huge uninsured medical bills, and other similar factors can cause you to experience financial hardship. Filing for bankruptcy gives you a fresh financial start. In California, you can file for chapter 7 or chapter 13 bankruptcy. If you are filing for bankruptcy in Rancho Santa Margarita, you should use an experienced Rancho Santa Margarita bankruptcy attorney.
At Los Angeles Bankruptcy Attorney, we offer the best bankruptcy filing services. We will guide you on the process of filing for either Chapter 13 or chapter 7 bankruptcy. We will also offer advice on the best type of bankruptcy to file. If you are in California, do not hesitate to give us a call at 424-285-5525 or visit our website, https://www.losangeles-bankruptcyattorney.com